FACULTY OF BUSINESS MANAGEMENT

OPERATIONS MANAGEMENT
OPM530
( INDIVIDUAL ASSIGNMENT REFLECTION )

TOURISM INDUSTRY IN JAPAN

PREPARED BY :

STUDENT’S NAME ID NO GROUP

Nurin Ilyana Binti Mohammad Zahir 2019294254 BA2332A

PREPARED FOR : MADAM MASHITAH MOHAMED ESA

TABLE OF CONTENT

N CONTENT PAGES
O
1. INTRODUCTION 1
2.
ARTICLE : JAPAN TOURISM FACES 80% DROP 2-3
AS CORONAVIRUS THREATENS ABENOMICS
3.
TOURISM INDUSTRY IN JAPAN 4

4. CONTRIBUTION OF TOURISM TO SERVICE

EXPORTS 5
5.
IMPACT OF THE CRISIS TO THE TOURISM 6
ECOSYSTEM

6. IMPACTS OF COVID-19 ON SELECTED

TOURISM INDUSTRY BRANCHES 7-8
7. COVID-19 SAFETY MEASURES FOR TOURISM 9
INDUSTRY
8. CONCLUSION 10
INTRODUCTION

Tourism is one of the most directly affected sectors in this current crisis for immediate
and long term responses. With international aviation at a virtual standstill since
March, the closure of tourism sites and attractions, the cancellation or postpone of
major festivals and events, and restrictions on public gatherings either indoor and
outdoor in many countries, because of the impact of COVID-19 on global tourism has
been overwhelming and immediate.

The tourism economy has been heavily hit by the COVID-19 pandemic, and its
spread widely. Depending on the duration of the crisis, revised scenarios indicate
that the potential shock could range between a 60-80% decline in the international
tourism economy in 2020. Beyond to support the tourism sector, countries are also
shifting to develop recovery. These include considerations on lifting travel
restrictions, restoring traveller confidence and rethinking the tourism sector for the
future.

The Covid-19 outbreak has destroyed many Asian airline markets, but for Japan the
timing of the demand plunge is particularly unfortunate. This is supposed to be a
great year for the Japanese aviation and tourism sectors, as they have planned for a
significant flow in their sectors. The government has made tourist growth an
economic priority, and has backed up with a growth of Tokyo airport capacity this
year to coincide with the summer Olympics coming to the city. However, the big
plans of the government and airlines for 2020 are now under threat due to the covid-
19 crisis. Dropped demand and travel restrictions have caused Japanese airlines to
cut back capacity in some key Asian markets through March 2020, and cuts are
beginning to affect the domestic market too. Meanwhile, overseas airlines are scaling
back their own services into Japan.

1
ARTICLE : JAPAN TOURISM FACES 80% DROP AS CORONAVIRUS
THREATENS ABENOMICS

2
TOURISM INDUSTRY IN JAPAN

3
Compared with January 2019, the total sales amount of the major travel agencies in
Japan in January 2020 decreased by 6.8% due to the COVID-19 pandemic. The
number of international visitors to Japan was 1.7 million in January 2020 (down from
2.7 million in 2019) and was 1.1 million in February 2020 (down from 2.6 million in
2019).
The travel consumption by international visitors for the January-March period of 2020
is estimated to be JPY 672.7 billion, a decrease of 41.6% from the same period of
the previous year. The number of international flights during the third week of April
has decreased by more than 90% compared to the period before COVID-19. The
overall occupancy rate of hotels in February 2020 was 53.0%. In addition, the Tokyo
Olympic Games were postponed.
Regarding policy measures to support affected industries, the Japanese Government
has expanded employment subsidies and provided strong support, including interest-
free unsecured loans. On the 7 April 2020, the Japanese Government announced a
new Emergency Economic Package, which amounted to JPY 117 trillion (approx.
USD 1 trillion), to support the continuation of employment and business in all
industries, including tourism, as well as to recover future economic.The emergency
economic package includes expansions of the employment subsidy, the liquidity
support, and strong demand stimulation measures for tourism, seeking to support the
economy after the COVID-19 pandemic is ended. The demand stimulus measures
include a new subsidy amounting to over USD 10 billion in the form of discounts and
vouchers to support tourism, transport, food services, and event businesses to create
an immediate post-pandemic recovery.
In addition to the above emergency economic package, the Japan Tourism Agency
will spend USD 2.2 billion to attract tourists immediately after the end of the
pandemic in an effort to make tourist destinations attractive, improving the travel
environment, and carrying out promotions for international tourists.
The Japan Tourism Agency and the Japan National Tourism Organization (JNTO)
provide timely information in multiple languages through their respective websites, as
well as their official twitter and weibo accounts.
JNTO operates a visitor hotline 24 hours a day, 365 days a year. Call for tourist
information or assistance in case of accidents and emergencies, including those
involving with the Coronavirus. Support language is available in English, Chinese,
Korean, and Japanese.

CONTRIBUTION OF TOURISM TO SERVICE EXPORTS

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The figure above shows that percentage of exports service in Japan has decreased
due to the Covid-19. Tourism is a labour intensive sector, directly contributing 6.9%
of employment on average. The sector is a leading source of employment and job
creation, providing a high volume of jobs for low skilled workers, together with higher
skilled jobs. The sector employs many seasonal, part-time and temporary workers.
With the impact of the crisis continuing and reduced capacity for many industry
branches, many of these jobs will be directly affected. In normal circumstances, the
sector can help provide diverse employment opportunities for migrants, women,
students and older workers, not only in major cities but also in remote, rural and
coastal areas, as well as other often economically fragile locations where alternative
opportunities may be limited. Tourism is one of the most directly affected sectors in
this current crisis and this calls for immediate and long term responses.

The global tourism will be hard hit throughout 2020 and beyond, even if the spread of
the virus is under control in the coming months. Tourism businesses will be the first
to shut down as tourism involves people interactions and the movement of people
travelling from their place of usual residence to destinations within their own country,
and to other countries. Tourism activities are also likely to be among the last to
restart, and on a phased basis. Even when these businesses do open, it will be
under new operating procedures in the absence of a vaccine. The pandemic is also
likely to have an impact on tourist behaviour, impact the resumption and recover of
domestic and international tourism.

IMPACT OF THE CRISIS TO THE TOURISM ECOSYSTEM

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The pandemic has been disruptive across branches of the tourism sector, firms, and
destinations, with some parts of the sector more affected than others, now and in the
longer term. This has obvious connections with SMEs as most firms in the tourism
sector are small in scale. Given their limited resources and existing obstacles in
accessing capital, the period over which SMEs can survive a shock will likely be
shorter than for larger firms.

SMEs may have less resilience and flexibility to cope with the costs that such shocks,
with a survey of SMEs indicating there is a serious risk that over 50% of SMEs will
not survive the next few months. A widespread collapse of SMEs could have a strong
impact on national economies and global growth prospects, and on the tourism
economy. Governments have been quick to acknowledge the specific circumstances
of SMEs, and have put in place policies to support them, with policy responses
frequently followed this sequence of measures: health measures, and information on
how to adhere to them, measures to address liquidity by deferring payments,
measures to supply extra and more easily available credit to strengthen SME
resilience, measures to avoid the consequences of unorganized lay-offs, and
structural policies. These general SME measures have also been accessible to
SMEs in the tourism sector.

IMPACTS OF COVID-19 ON SELECTED TOURISM INDUSTRY

BRANCHES

 Transport and tour operators

As for the aviation, Airlines have had to drastically reduce and end their activities,
with extreme impacts of the short-term on employees and dependant activities.
International Civil Aviation Organization (ICAO) estimates, as of 8 May, indicate that
the fall in scheduled international passenger traffic during 2020, will equate to a
reduction of between 44 to 80% of international passengers. Airports Council
International, as of 5 May, estimates that the crisis will result in a reduction of 4.6
billion passengers in 2020. This will have a knock on effect on airports, which could
face a global loss of USD 97 billion. IATA expects recovery in air travel to lag
economic recovery, with no uptick before 2021. Some airlines which had grounded
flights, such as Ryanair, have announced plans to restart flight operations at a
reduced capacity, while Emirate is has introduced COVID-19 testing prior to
boarding. 

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Cruise lines also have facing the double challenge of ensuring visitor and worker
safety, as some cruises were not able to step off and repatriate clients, and losses in
bookings and revenues. In the United States, a no-sail order had been extended until
July. Following an extended period where a number of cruise ships remained at sea
while seek to secure permission to berth and disembark passengers, as people
movement is limited or discouraged, including in countries which are easing
restrictions, railways are seeing significant drops in revenues and passengers. While
for the tour operators, reduced operations until further notice as the pace at which the
situation evolved increase organizational complexity, across administrative
boundaries.

 Accommodation and food service

Globally, hotels have reported having extremely low occupancy rates, or have
experienced closures on a massive scale. Big hotel chains have seen their stock
price plunge as a result.In the first week of May many countries had an average
occupancy rate lower than 30%. Some shared accommodation categories, such as
hostels or camping, may be impacted in the longer term. The virus outbreak has put
shared accommodation platforms under pressure, with reported declines in
apartment bookings. In May, Airbnb cut 25% of workforce since there is only few
customers that book for the hotels since the crisis situation have started.For holiday
resorts, ski resorts were forced to end the winter season earlier due to increasing
covid-19 spread, and those that have successfully diversified to develop an summer
season offer are increasing seeing this at risk.

As for the restaurants, food and catering service providers had initially been required
in many countries to increase social spacing in eating establishments, limit their
activity to delivery only in some instances, or entirely shut down activities. Even as
restrictions are being lifted, food-related activities are still limited. There are many
places that are closing such as restaurants, cafes, pubs and others. The customers
only allow to take away the meals and eat it at their own place instead dine in at the

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restaurant. While for the other sectors, such as business, meetings and events travel
also get affected because of the crisis situation. Around the globe, companies have
canceled or suspend the business travel due to the Covid-19, in some cases until
2021 including the 2020 Olympic Games. By 20 March, the Global Association of the
Exhibition Industry estimated that more than 500 trade shows had been canceled in
the preceding weeks, with an estimated cost of up to EUR 23 billion in lost orders for
exhibitors.

Furthermore, culture, sports and entertainment is the most affected due to the 2020
Olympic. The museums and cultural event organizers are facing huge financial
losses as facilities shut down, and events have been canceled. Major sporting and
entertainment events are also being affected, including the Tokyo 2020 Summer
Olympics which have been postponed. There continues to be increased uncertainty
around the staging of other global events, while many smaller, more local festivals
and events that are important to local destinations have also been canceled.
Furthermore, people who is often working as freelancers, tour guides are seeing
significant decline in their activities, placing significant constraints on their income.
Travel technology companies have loss many profit and need to reduce their
workers. Global distributions systems, online travel agencies and online booking
platforms are also being hit by the crisis due to the significant slowdown in
transactions.

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COVID-19 SAFETY MEASURES FOR TOURISM INDUSTRY

The pandemic has going down slowly since end of the May. Although the good news
come out, Japanese government always make sure the safety of the citizen in order
to reduce the cases and avoid of new cases to come out. In order to the restrictions,
as for the measures for airports and airlines, Japanese airports are recommending
travelers with fever and cough to wear masks. Front line staff at airports is being
encouraged to wear masks to prevent spread and infection. Door knobs and
handrails in the airport terminals are being disinfected and cleaned frequently at both
domestic and international airports. Airlines such as Jet star are encouraging cabin
crew and ground staff to wear face masks and gloves.

In addition, there will be an entry ban for foreigners from certain countries that have
not healing from the pandemic and still get new cases such as US, Spain and
others.Foreigners, who travelled to the Chinese provinces of Hubei and Zhejiang
within 14-days of their arrival in Japan, are banned entry into Japan. Further,
foreigners holding passports issued by the two provinces are denied entry into
Japan.The ban on those with a travel history to Hubei province was implemented
first, from 1 February, and extended to include Zhejiang province starting 13
February. In addition, foreigners who are from the MS Westerdam cruise ship that is
docked in Cambodia were denied entry into Japan temporarily. Japan has extended
the travel ban to foreign citizens from the US, China, South Korea, Iran and 21
European countries. Japanese government will strictly get updated with the affected
cases around whole countries from time to time. As for now, US is the first country on
the list that affected with huge cases and new cases still ongoing in their country.

The travel companies have provide the accommodations to prepare for what may be
the new normal for tourism in post-pandemic Japan. Example, famous hot-spring
Ryokan in the city of Tendo, Yamagata Prefecture, has decided to shift its focus from
large parties to individual guests. Before the pandemic, roughly 20 percent of
customers were inbound tourists. They have been using the temporary closure of the
Ryokan during the state of emergency to renew their service and infrastructure
during the restrictions. The inn will be closing its buffet and also bar and will introduce
a system to check in guests in their rooms to avoid queues forming at the entrance.
Private rooms with open-air will be offer to the customer and all-exclusive deals
where guests for a set price will be served all they can drink, including beer produced
by the Ryokan.

CONCLUSION

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As we can see the tourism industry in Japan has likely to be drop because of the
Covid-19. It also lead to the plummeting of an economy since the international tourist
is not allowed to enter any country during the restriction. To play an important role in
leading the initial recovery phase, domestic tourism is expected give the uncertain
outlook for international travel. Countries where domestic tourism already represents
a significant share of the tourism economy are thus likely to see recovery in the
sector more quickly than countries that are heavily dependent on international
tourism flows. Many countries, and the tourism sector, are moving to promote
domestic travel and cater to visitors from their own country.

On the other hand, Industry should prioritize safety and confidence over other
aspects of a seamless journey. The huge hope of everyone is that the ongoing crisis
will serve as a wake up call for the travel industry to work together on open data
initiatives during the aftermath. After all, in order for travelers to learn and avoid
potential risks of being in close contact with someone infected, airlines, airports and
hotels must work together to discontinuity the cases of Covid-19 from spreading huge
again.

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